FUNDVIEW-HSBC sees gold as risk trade; bypasses "hot" silver

Thu Mar 3, 2011 5:11pm GMT

* Gold still a "risk-on" trade

* Silver could rally further but too pricey for now

By Amanda Cooper

LONDON, March 3 (Reuters) - The financial and geopolitical backdrop has not deteriorated enough for gold to show off its safe-haven credentials and it remains firmly a risk trade, while the chance to get into silver may have passed, says HSBC.

Charlie Morris, head of absolute return at HSBC Global Asset Management, recently cut his exposure to gold.

The firm has taken a defensive view of the world and believes bullion is not the best way to profit from that stance, even though though HSBC Global Asset Management is bullish overall towards gold.

Instead, he believes big-brand equities such as Wal-Mart (WMT.N: Quote) or Coca-Cola (KO.N: Quote) offer better protection against the risks facing the global economy now.

"We're at a crossroads and it's a very complex time because on the one hand, you want to protect yourself against inflation, but those trades are extremely overcooked," he said.   Continued...

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